Japan Real Estate Market Outlook 2016

The office market in 2015 continued to be driven by demand for expansion and upgrades from corporations in pursuit of growth opportunities. Given expectations for steady earnings growth on the back of a weaker currency and inbound demand, this trend is likely to continue into 2016.

The overall Greater Tokyo logistics market is also likely to remain tight but the differences in trends between submarkets are expected to increase. As in 2015, new supply will reach a new record high in 2016. Demand for state-of-the-art logistics facilities continues to strengthen.

The real estate investment market in 2016 may grow by close to 15%, approaching levels recorded in 2014. If so, this will be attributable to regional cities seeing an increase in deals, a compression in cap rates (= rise in prices), and more properties on offer in Tokyo.